More media, less news
1. The first thing to greet a visitor to the Oslo headquarters of Schibsted, a Norwegian newspaper firm, is its original, hand-operated printing press from 1856, now so clean and polished it looks more like a sculpture than a machine. Christian Schibsted, the firm’s founder, bought it to print someone else's newspaper, but when the contract moved elsewhere he decided to start his own. Although Schibsted gives pride of place to its antique machinery, the company is in fact running away from its printed past as fast as it can. Having made a loss five years ago. Schibsted's activities on the internet contributed 35% of last year’s operating profits.
2. Unfortunately for the newspaper industry. Schibsted is a rare exception. For most newspaper companies in the developed world, 2005 was miserable. They still earn almost all of their profits from print, which is in decline. As people look to the internet for news and young people turn away from papers, paid-for circulations are falling year after year. Papers are also losing their share of advertising spending. Classified advertising is quickly moving online. Jim Chisholm, of iMedia, a joint-venture consultancy with IFRA, a newspaper trade association, predicts that a quarter of print classified ads will be lost to digital media in the next ten years. Overall, says iMedia, newspapers claimed 36% of total global advertising in 1995 and 30% in 2005. It reckons they will lose another five percentage points by 2015.
3. Even the most confident of newspaper bosses now agree that they will survive in the long term only if, like Schibsted, they can reinvent themselves on the internet and on other new-media platforms such as mobile phones and portable electronic devices. Most have been slow to grasp the changes affecting their industry- ‘remarkably, unaccountably complacent', as Rupert Murdoch put it in a speech last year-but now they are making a big push to catch up. Internet advertising is growing rapidly for many and is beginning to offset some of the decline in print.
4. At first, from the late 1990s until around 2002, newspaper companies simply replicated their print editions online. Yet the internet offers so many specialised sources of information and entertainment that readers can pick exactly what they want from different websites. As a result, people visited newspaper sites infrequently, looked at a few pages and then vanished off to someone else's website. Another early mistake was for papers to save their best journalists for print. This meant that the quality of new online editions was often poor. Websites hired younger, cheaper staff. The brand's prestige stayed with the old medium, v/hich encouraged print journalists to defend their turf. Still today at La Stampa, an Italian daily paper owned by the Fiat Group, says Anna Masera, the paper’s internet chief, print journalists hesitate to give her their stories for fear that the website will cannibalise the newspaper.
5. For the past couple of years, however, newspapers have been thinking more boldly about what to do on the internet. At its most basic, that means reporting stories using cameras and microphones as well as print.
More newspaper companies are likely to treat their websites as a priority these days. ‘Before, newspapers used their second- and third-rate journalists for the internet,' says Edward Roussel, online editorial director at Britain's Telegraph Group, ‘but now we know we’ve got to use our very best'. Many companies are putting print journalists in the same room as those who work online, so that print writers are working for the website and vice versa. Some insist that this is a mistake. ‘It is completely wrong not to separate web and paper operations,’ says Oscar Bronner, publisher of Dor Standard, a daily paper in Austria. Print journalists don't have time to reflect and analyze properly if they also have to work for the website, he argues.
6. How impressive are the results of these online experiments? At lots of newspaper companies, internet advertising is growing by at least 30% a year, and often more. At la Repubblica in Italy, for instance, the paper's website gets about 1 m visitors a day, nearly double the circulation of the printed paper. The value of online ads grew by 70% in the first half of 2006. For the first three months of 2006, the Newspaper Association of America announced that advertising for all the country's newspaper websites grew by 35% from the same period in 2005, to a total of $613m. But to put that in perspective, print and online ads together grew by only 1.8%, to $11 billion, because print advertising was flat. At almost all newspapers the internet brings in less than a tenth of revenues and profits. At this point, says Mr Chisholm, 'Newspapers are halfway to realising an audience on the internet and about a tenth of the way to building a business online.'